Socialism: An Economic and Sociological Analysis

Summary

Socialism: An Economic and Sociological Analysis is Ludwig von Mises's comprehensive critique of socialist thought, published in German in 1922 as Die Gemeinwirtschaft and revised in 1932. J. Kahane's English translation appeared in London in 1936; Yale University Press reissued it in 1951 with an epilogue, and the Liberty Fund edition of 1981 added a foreword by F. A. Hayek. The book begins by observing that socialist ideas dominated the age, shaping the programs of parties that called themselves opponents of socialism as well as its supporters. Mises sets out to examine those ideas as a whole. In the first part he contrasts liberalism and socialism, discussing ownership, the state, democracy, the family and the social position of women, and argues that private property in the means of production is the basis of the division of labor. The second and central part examines the economics of a socialist community. Here Mises develops the argument of his 1920 article on economic calculation: without market exchange of factories, land and machinery there can be no prices for them, and without such prices planners cannot compare the costs of alternative methods of production. He also discusses distribution, the incentives of managers and workers, and the problem of a socialist state's relations with other nations. The third part questions the claim, central to Marxism, that history moves inevitably toward socialism; Mises criticizes the materialist conception of history and the theory of class struggle and offers his own account of social development as the growth of cooperation through the division of labor. The fourth part considers socialism as a moral demand, including arguments from Christian ethics and ethical socialism. The fifth part, on what Mises calls destructionism, argues that interventionist policies such as labor legislation, compulsory social insurance and confiscatory taxation consume accumulated capital. The book had a large effect on a generation of economists. Hayek wrote that it changed the views of many young idealists who had returned from the First World War, himself among them, and Wilhelm Röpke and Lionel Robbins acknowledged its influence. Socialist economists such as Oskar Lange answered its calculation argument in the 1930s. Critics have also found its treatment of ethics and religion one-sided, but it remains one of the most thorough examinations of socialism written from a liberal standpoint.

Top Lessons

• Defining the terms

  Mises defines socialism as public ownership of the means of production rather than as a set of aims. Students can consider how definitions shape arguments.

• Ideas and history

  Mises disputes the claim that history inevitably leads to socialism. Students can weigh claims that the future is already determined.

• Means and ends

  Much of the book argues that socialism would fail to reach its own goals. This invites discussion of judging policies by their consequences as well as their intentions.

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